Yes, you can do Making Tax Digital for free. HMRC doesn't make its own software, but several companies on HMRC's list of recognised software have free plans, and for a sole trader with one simple trade and a handful of receipts a month, free is genuinely fine. But the sorting stays with you, and that's where free can end up costing money.
You're already in Making Tax Digital if your self-employed turnover plus any rent was over £50,000 in 2024/25. The line drops to £30,000 from April 2027 and £20,000 from April 2028. Our Making Tax Digital page has all the dates.
Which MTD software is actually free?
We checked these in October 2026. Each one comes with a condition.
- FreeAgent is free with a NatWest, RBS or Ulster Bank business current account, while you keep the account. With Mettle, it's free while you make at least one transaction a month.
- Starling builds an MTD tool into its sole trader account, with no monthly fee. You have to bank with Starling to use it.
- Clear Books has a free plan for sole traders and landlords with no transaction limit. It doesn't do VAT.
- Sage has a free sole trader plan if you're not VAT registered and send no more than five invoices a month.
- Zoho Books has a free plan with one bank account and up to 1,000 invoices and 1,000 expenses a year. It's only free under a turnover limit, and we couldn't confirm the UK figure on Zoho's own site, so ask them first.
Plans change, so check the provider's page and HMRC's software finder on gov.uk before you commit. HMRC lists recognised products but doesn't recommend any of them.
Can I keep using my spreadsheet?
Yes. HMRC accepts spreadsheet records if you connect them to bridging software, which reads the spreadsheet and sends the quarterly update for you.
The catch is the digital link. Figures have to travel from the spreadsheet to the software digitally, through linked cells or a file import. Once a record has gone into a quarterly update, you can't retype it or move it by hand.
What free software won't do for you
It adds up whatever you put in. It won't know that the £58 at the Tesco garage at 5am was diesel for the van and not the weekly shop. That's your call, on every line of the bank feed.
And it can't find what was never put in. The cash you paid for van tyres, the invoice that's still a WhatsApp photo on your phone. If it isn't in the software, you don't claim it. Say £600 of costs goes missing over a year. If you pay tax at the basic rate, that's £120 more income tax, before National Insurance.
Nobody checks the quarterly update before it goes to HMRC except you. In 2026/27 a late one costs nothing. From April 2027 each late update earns a penalty point, and four points means a £200 fine.
When £50 a month beats free
Let's be straight. £50 a month plus VAT is £720 a year. If your books are simple and you don't mind sorting your own bank feed, that's a lot to pay for something you can do yourself. Keep the free software.
It's worth paying when the hours and the mistakes cost you more than the fee. If you come off a 12-hour shift, the last thing you'll do is go through forty transactions. So it doesn't happen, and by the end of the quarter there's a pile.
That's who our Starter plan is for. You still keep your own records day to day. We set up the software and connect your bank, then once a month we go through your transactions and ask about anything that looks wrong. We send all four quarterly updates and the final declaration. If you'd rather not touch the bookkeeping at all, our Complete plan does it for you at £80 a month plus VAT.
Not sure which side you're on? Get in touch, tell us roughly how many transactions you have a month, and we'll tell you if free will do.
Sources: HMRC, Choose the right software for Making Tax Digital for Income Tax, Use Making Tax Digital for Income Tax: create digital records, Find out if and when you need to use Making Tax Digital for Income Tax and Penalties for Making Tax Digital for Income Tax. Providers: FreeAgent, Starling, Clear Books, Sage and Zoho Books. Correct as at October 2026.